Chemical Leasing Toolkit

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Task 2: Pre-assess chemicals and processes

In Task 1 you identified potential chemicals and processes for Chemical Leasing. Now, you need to pre-assess them to determine whether the Chemical Leasing business model would be relevant. This is the objective of Task 2.
 

Keep in mind that the change from your existing business model might require additional efforts and resources; therefore, it is important to determine whether there are economic or other reasons that justify implementation of the new model.

Also keep in mind that the decision to implement the Chemical Leasing model should be grounded on the following criteria for sustainability:

a) Reduction of adverse impacts for environment, health, energy and resource consumption caused by chemicals and their application and production processes

b) Improved handling and storage of chemicals to prevent and minimize risks

c) No substitution of chemicals by substances with a higher risk

d) Economic and social benefits are generated; a contract should contain the objective of continuous improvements and should enable a fair and transparent sharing of the benefits between the partners

e) Monitoring of the improvements needs to be possible.

One company might have several processes and chemicals which could be “suitable” for Chemical Leasing implementation.  For example, if the company is a beverage producer, it might use chemicals for lubrication, cleaning, disinfection and bonding, all of which are suitable/relevant for Chemical Leasing.  Furthermore, different chemicals can be applied in the same process. These chemicals need to be pre-assessed individually.

a) Chemicals for the lubrication process:

Lubrication is needed in many industry sectors. Picture 1 below demonstrates conveyer lubrication where different chemicals are used for the different aims.

Picture 1: Conveyor lubrication

b) Chemicals for cleaning and disinfection of fillers and conveyors:

   - Automated CIP (Cleaning in Place): Cleaning and disinfection of tanks, fillers, pipes). 

   - Automated COP processes (Cleaning out of Place):  Cleaning of equipment by removing items from their operational area and taking them to the cleaning station for cleaning (there are static and mobile versions).

c) Bottle disinfection

d) Glass bottle washing

e) Bonding of labels (applying water-based or hot melt adhesive)
 

Pre-assessing a chemical in a process

Some chemicals have hazardous properties and can have negative impacts on human health and/or the environment.  You should consider these, as well as economic factors, when pre-assessing the chemicals. Each chemical should be analyzed (“pre-assessed”) based on three parameters: quantity consumed, cost and hazardousness.
 

Parameter 1 – Quantity consumed

Define the amount of the chemical consumed annually in a given process and assign the chemical “points” as shown in the chart below. The greater the quantity of a chemical used, the higher the general suitability for Chemical Leasing.
 

Quantity of chemical X applied Recommended criteria Points
High More than 100 tons/year 5 points
Medium More than 10 tons/year 3 points
Low More than 1 tons/year 1 points

Parameter 2 – Cost

Check the annual purchasing cost of the chemical and assign the chemical “points” as shown in the chart below. The higher the cost, the higher the general suitability for Chemical Leasing.
 

Cost of chemical Recommended criteria Points
High More than €100,000/year 5 points
Medium Between €100,000 and €10,000/year 3 points
Low Less than €10,000/year 1 points

Parameter 3 – Hazardousness

Most chemicals present some degree of hazard, such as toxicity, flammability, or corrosiveness. The greater the hazard associated with a given chemical, the greater the need to optimize its use or to consider substitution with a less hazardous/lower risk alternative. Identify each chemical’s hazardousness and assign the chemical(s) “points” as shown in the chart below. Information about a chemical’s hazardousness can be found on the product label. The detailed information can be found on the product Safety Data Sheet (SDS), which can be obtained from the supplier.
 

Hazardousness of chemical X Relevance Points
High Hazardous chemical of high or potential concern 5 points
Medium Chemical that have hazardous property(is) (for example, chemical is corrosive, flammable etc) 3 points
Low Non hazardous chemicals 1 points

 

Calculating the final score

Add up the points in the three charts to give each chemical a final score.

A company with a lubrication process consumes lubrication chemicals in high volumes, the costs are estimated as medium and hazardousness as low. The final score will be:  5+3+1=9

  • If the final score is equal to or more than 7, implementation of the Chemical Leasing model may be relevant.
  • If the final score is less than 7, Chemical Leasing is not recommended.
     

You may repeat this procedure for other chemicals and processes.

 

With this Task done, you have completed the pre-selection and pre-assessment of chemicals and processes which can provide you with promising Chemical Leasing cases.

Continue with Task 3 – Pre-defining the unit(s) of payment